The U.S. Constitution was established following the inadequacies of the Articles of Confederation, which revealed the need for a stronger federal government to address issues like interstate commerce, taxation, and national defense. The Constitutional Convention in 1787 brought together delegates, leading to a new framework of governance that balanced power between states and the federal government. The ratification of the Constitution in 1788 laid the foundation for the democratic system in the United States, establishing principles outlined in the Bill of Rights to protect individual liberties.